News

Week of March 27- April 2, 2000

[Thursday, March 30, 2000]

PS2 Banking
Sony is teaming up with U.S. investment bank J.P. Morgan and Japan's Sakura Bank to create an online bank accessible from the Playstation 2 console. Sony will contribute 80 percent of bank's $356 million start-up capital, while Sakura will add 16 percent and J.P. Morgan four percent. The Playstation 2 bank will begin by offering deposits and bill paying, but plans include offering services such as mortgages and loans. Sony made other moves to strengthen it's online content offerings, in part by housing Sony Music Entertainment and Sony Pictures Entertainment in a new holding company called Sony Broadband Entertainment. The new holding company will seek to ways to improve content distribution across multiple media and will examine strategic alliances. "This [will] stamp out speculation that we may sell the U.S. entertainment units, and shows our strong commitment in reinforcing the content businesses," said Sony President Nobuyuki Idei.

Add Monsters
The trio of Mike Ball, Nina Kristensen, and Tameem Antoniades has left the friendly confines of SCEE's Cambridge studio to create a new development studio by the curious name of Just Add Monsters. Prior to their departure from Sony, the group had been involved with the Medievil series as well as Frogger. Ball served as head of internal technology, Kristensen as art manager, and Antoniades as lead designer while at Sony. The group intends to focus what they call social games, broadband multiplayer games for casual gamers.

Won.net Merger
Havas Interactive is looking to secure and expand its place in online gaming by merging newly purchased Prizecentral.com with its own Won.net. The merged site will be called Flipside.com and will combine Won.net's action, stratergy, and simulation game library with Prizecentral's casual games and prize allocation system to offer over 50 multiplayer game which can be played for prizes. The combined site will have approximately four million registered users from over 80 countries, making it the second largest gaming site on the Internet. "There are 12 million online gamers world-wide currently, and we expect that to grow to 28 million by 2004. We anticipate that this will create an online market worth $5 billion dollars in 2004," said Havas CEO Hubert Joly, "Havas Interactive will have, on a pro-forma basis in the online gaming space, a reach of 4.6% on the Internet vs. 2.8% for Microsoft's Zone and 1.1% for ea.com" The deal is expected to close in mid April.

[Wednesday, March 29, 2000]

S3 Looks to Sell
S3 Inc. is looking to sell off its graphics chip business in order to better focus on its burgeoning Internet device business. The company reported that they have been in discussion and have received term sheets from several prospective suitors, but S3 would not disclose who the would-be buyers might be. S3 also refused to rule out the possibly of no sale at all, commenting only that they would assess all options before making a decision.

Infogrames Up
Infogrames is bucking the current trend by reporting strong gains in sales and earnings in the first half of its 2000 fiscal year ended December 31. Company revenues increased 65 percent, to $276.8 million, from last year's first half results. Consolidated net income rose 81 percent to $18.1 million. Infogrames credits reduced productions cost and an improved PC games catalog for driving its profits.

DC Q3A
Sega has finally Quake III Arena for the Dreamcast official. Sega announced that it has come to an agreement with Activision to publish the best selling shooter for Sega's console. Activision and Raster Productions will handle the port, while Quake makers id will oversee the conversion. Sega also reported that Dreamcast players and PC Quake fans would be able to compete in networked games. Sega plans to release the title later this year.

Yahoo Sued
Sega, Nintendo, and Electronic Arts are taking Internet portal Yahoo to court. The three companies contend that Yahoo is guilty of creating an arena for the sale of pirated game software and hardware needed to run it. The suit says such items are freely available from Yahoo's online auction site as well as from online retailers leasing space on Yahoo sites. The companies are asking the court for an injunction against the sales as well as damages of up to $100,000 per violation. "Yahoo has created a [place] for thieves to sell stolen property,'' said EA's Jeff Brown.

[Tuesday, March 28, 2000]

EA Tracking Stock
Electronic Arts announced shareholder approval of its plan to create a new class of common stock to track the performance of the company's new online unit. As part of the new stock issue, EA finished the sale of four million Class B share, along with a warrant for an additional two million, to AOL as part of the companies alliance. Electronic Arts plans to co-launch it online service with AOL sometime this summer, and a public issue of some the Class B shares will follow the launch. EA shareholders also approved equity incentive plans for both Class A and Class B common stock.

Lithtech Gets Real
Lithtech signed a multi-game development deal with Real Networks to create original content for exclusive distribution through the new Real.com Games division. Real hopes that it can leverage it more than 95 million registered user to buy games for download online rather than purchasing packaged CD titles. "Recent surveys show that over 60% of Real.com Network users download free games on the Internet, yet most still buy CD-based games at retail outlets,'' said Real's Mark Hall, "Real.com Games is uniquely positioned to change the way consumers acquire high-quality games with an online, digital distribution model.''

Macrovision Buys Globetrotter
Macrovision has signed a letter of intent to acquire Globetrotter Software, a leading OEM supplier electronic licensing and license management technology to software vendors. Macrovision will acquire all outstanding shares and option of Globetrotter in exchange for 11.2 million share of Macrovision. The two companies will combine their offerings to create a full suite of digital rights management technologies. "The combination of Macrovision and Globetrotter can serve the entire software industry - affecting applications as diverse as consumer entertainment titles in the home and engineering applications for global enterprises," said Globetrotter founder Matt Christiano

[Monday, March 27, 2000]

3dfx Buys Gigapixel
Struggling 3D chipmaker 3dfx is investing $186 million, in the form of 15.6 million 3dfx shares and options, to acquire would be privately held Gigapixel Corporation. 3dfx hopes to exploits Gigapixel's core technologies, those that reduce power and memory consumption in 3D acceleration, in both tradition accelerators and products related to new 3D markets like cell phones and PDA's. "There is a substantial opportunity to enable graphics differentiation by providing high quality 3D display capabilities in low power and low cost form factors," said 3dfx CEO Alex Luepp, "This is a tremendous growth opportunity, and it is a market that is presently largely untapped." As part of the deal, Gigapixel CEO George Haber will join the 3dfx Board of Directors.

Aureal Turmoil
Poor fourth quarter financials are only the beginning for Aureal, as the company now faces the mass resignation of all executive officers and senior staff members. Aureal's fourth quarter operations generated a net loss of $9.5 million, a large increase from last year's fourth quarter loss of $3.5. Loss for the year as whole reached $26.9 million, compared to losses of $18.5 million in 1998. Aureal attributes some of this to $6.4 million in legal fees related to it patent suit with Creative Labs. Resignations followed the financials by a day, with President and CEO, Kip Kokinakis, Chief Technical Officer Scott Foster, Chief Financial Officer David Domeier, Chief Operating Officer and General Counsel Brendan O'Flaherty, and the senior staff of Aureal announcing their departure. The Aureal Board of Director has announced that it is considering all options, including new management, a sale of assets, or the cessation of operations.

Rambus Names Sega
Sega Enterprises and Sega of America have been named in a suit brought against Hitatchi by Rambus. Rambus has requested that the United States International Trade Commission investigate the importation of Hitatchi SDRAM and DDR SDRAM that Rambus says infringes on its patents. Rambus further hopes to stop the importation and sale of the offending memory, including microprocessor and memory products used in Sega's Dreamcast console. Rambus has a total of eight patents involved in two separate suits originally filed in January and February.

Eidos Warning
Eidos has joined the ranks of publisher warning investors of a short fall. The company will announce fourth quarter and full year results upon the close of its business year on March 31, and all indication point to significant drop in sales. Eidos is warning investors that a general slowdown in costumer demand has caused retail orders of all titles to be much lower than expected. Eidos predicts that the transition to next-generation platforms will have a positive impact on sales, but stopped short of predicting a financial turnaround. The profit warning sent Eidos shares down 50 percent in Friday trading.

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